The gender pay gap: a 40 year problem to solve across the OECD

3 March

Steady progress continues to be made in OECD countries towards greater female economic empowerment, but the gender pay gap continues to be a major issue with the average OECD woman still earning 15 per cent less than her male counterpart, despite becoming better qualified.

These are the key findings of PwC’s Women in Work Index which measures the level of female economic empowerment across 33 OECD countries. The Index is a weighted average of five indicators that reflect female participation in the labour market and equality in the workplace.

The Nordic countries, particularly Iceland, Sweden and Norway continue to occupy the top positions on the Index and Australia’s neighbour New Zealand performs strongly, reporting one of the smallest gender pay gaps at six per cent. Overall Australia was ranked middle of the pack in 16th place, one place lower than the previous report in 2016.

The report shows that participation of Australian women in the workforce is above the OECD average, with female unemployment also better than most OECD countries. However, a higher proportion of women in Australia are working part-time, with Australia having the third lowest rate of female full-time employment, demonstrating the strong preferences Australian families have for managing work and care responsibilities, in part due to a lack of access to affordable childcare, and in part due to strong gendered norms of work and care.

Whilst the difference between Australian female and male median wages is 15.4%, under the OECD average of 16.3%, PwC Leader of People and Organisation, Jon Williams said on the data that is available it will take most OECD countries around 40 years to close the gender pay gap.

“Whilst Australia continues to make slow progress in closing the gender pay gap, changes in attitude, focussed efforts by major employers including assessing and reporting of gender pay outcomes will help to accelerate this closing process,” Mr Williams said.

He also explained that as jobs and workplaces evolve over the next five to ten years in response to robotic process automation, artificial intelligence and machine learning, the underlying reasons for the gender pay gap in the first place could becomes less relevant.

“The gender pay gap is often driven by entrenched, subconscious attitudes and the outcomes those create. One example is that traditionally female dominated roles such as nursing and caring, creative and design roles, and customer focused roles are valued, and therefore paid, less than traditionally male dominated roles such as medical diagnosis, legal, and accounting roles.

“However, it is these traditionally male roles that are most susceptible to automation and will shrink faster in the next decade. Some of the traditionally female roles are harder to replace with machines and computers, and in response, women’s pay may surge as these female dominated roles become in more demand.

“In addition, women’s pay also suffers from the higher likelihood of women to take career breaks for child or elder care duties, which in a traditional linear career model, tends to slow their progress. As jobs change and disappear due to new and emerging technology, people are likely to retrain and change careers more frequently. The net result of this is that career breaks and changes will become more frequent and universal and therefore have less of a differentiating impact between the sexes,” Mr Williams said.

“So there is a chance that as the future of work changes we could close the pay gap much faster. The danger however is that this will be due to male earning shrinking rather than female earnings growing - reducing the potential positive economic impact of closing the gap.

“Overall, our best chance to solve the problem of the gender pay gap is changes in current attitude and behaviours and sensibly leveraging the changes we will see in jobs and workplaces of the future,” Mr Williams concluded.

Notes:

  1. The PwC Women in Work is a weighted average of various measures that reflect female economic empowerment, including the equality of earnings, the ability of women to access employment opportunities and job security.
  2. The methodology for measuring gains from closing the gender pay gap involves estimating the potential increase in total female earnings from equalising the average annual female earnings to average annual male earnings.
  3. For more information on PwC’s Women in Work Index and to explore the data and infographics, visit www.pwc.co.uk/womeninwork

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